Washington Report

9/2/11

Farm Income Up 30 Percent in 2011; Exports Hitting Record

USDA’s Economic Research Service at USDA this week said net on-farm income in 2011 will increase more than 30 percent over 2010, with government payments dropping a whopping 17 percent. All three indicators of farm earnings—net farm income; net cash income, and net value added—are expected to rise more than 20 percent over last year. Meanwhile, Agriculture Secretary Tom Vilsack said exports are expected to hit $137 billion, $22 billion higher than the record set in 2008 and $28 billion above a year ago. Vilsack said ag exports is only one “of a few sectors in the U.S. economy to enjoy a surplus”—projected at $42.5 billion, another record. Net farm income and net cash income are both forecast to exceed $100 billion for the first time ever this year, with ERS adding that the 2011 forecast for net farm income is the second highest inflation-adjusted value recorded since 1973. Net Farm income is seen hitting $103.6 billion.

Draft Dioxin Risk Reassessment Now Two Documents, Should be Out January, 2012

The long-pending EPA draft dioxin risk reassessment—that document which says dioxin is the “Darth Vader of carcinogens,” that 95 percent of dioxin exposure is through foods of animal origin because of the feed they eat, and that an average adult male’s chance of dying of a dioxin-related cancer is 1 in 1,000—is now two documents, and EPA says it will complete the “non-cancer portion” of the draft document by the end of January, 2012. Dioxin, and related compounds, including PCBs and PBBs, have been the subject of a controversial risk reassessment since 1984, with each version released by the agency more controversial than the last. This most recent iteration, released as a draft in 2003, wound up under full review by the National Academy of Sciences (NAS) after a agriculture/food industry coalition enlisted USDA, FDA and White House support for the review based on identified flaws in methodology and conclusions. This latest move—splitting the document into a non-cancer assessment and a cancer assessment—follows a report by EPA’s science advisory board (SAB) of its final report on the overall effort. The SAB report was based upon the NAS review of the document, which found EPA ignored contemporary dioxin science and used the wrong risk determination. While EPA’s press release talks of how the SAB “commended” the agency for this, and “supported the approach” taken by the agency on that, it’s hoped EPA will rewrite the reassessment to match what NAS recommended in 2005 and the SAB confirmed this year. There are those, however, who believe the SAB has cleared the path for publication of the non-cancer assessment based under pressure from the agency to close out the dioxin reassessment issue. Industry data clearly demonstrates over 90 percent of industrial emissions have been curtailed over the last decade and that current human exposure is less than background level – the level naturally occurring in the environment. In a dissenting opinion on the SAB review, one of the panel members contends the evidence presented so shows that “TCDD and its congeners are not known human carcinogens at occupational and high environmental exposure levels.” No deadline for completion of the cancer assessment was announced.

House Disaster Aid Pay-For Demand to be Ignored by Senate

A House GOP demand that any new spending on disaster aid be offset by cuts in other federal programs is expected to be ignored as the Senate returns next week to increase disaster spending as part of its appropriations process. The Senate’s energy/water and homeland security appropriations bills for FY2012 are expected to be marked up in subcommittee as early as September 7, and both are expected to carry new increased discretionary spending for disaster assistance. While the House version of those two bills carries a $2-billion increase for disaster relief, it pays for the increase by taking unspent monies away from the FY2009 economic stimulus package. This battle over disaster aid—which Senate Democrats contend does not need to be offset—will complicate efforts to quickly replenish dwindling funds for the Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund, hit hard by Hurricane Irene, the East Coast earthquake, wild fires, flooding and drought which have plagued 2011.

Boehner, Obama Dueling over Regulatory Impact

House Speaker John Boehner (R, OH) sent President Obama last Friday a letter asking for a list of all proposed Administration regulations that individually carry an economic impact of $1 billion, with Boehner challenging the Administration has already identified 219 planned rules that will cost at least $100 million each. In response, Obama sent Boehner a list of seven regulations with annual costs exceeding the Speaker’s target, but told Boehner “none of the contemplated rules will be implemented without careful consideration to cost-saving possibilities and alternatives.” He also refuted Boehner’s assertion his administration has dramatically increased regulation and red tape, hampering jobs creation. Potentially the most costly rule is an EPA proposal on ground-level ozone standards that carries a potential cost burden of $19-90, but EPA says its benefit is $13-100 billion. Other pending regulations and price tags identified by the White House are a new rule for coal and oil-fired utility steam generators: $10 billion; new emissions standards for industrial and commercial boilers: $3 billion; new standards for coal ash disposal from power plants: $600 million to $1.5 billion; new vehicle safety rules on rear view mirrors: $2 billion; new rules on electronic on-board recorders and documentation on hours of service for commercial truck drivers: $2 billion, and new hours of service rules on truck drivers: $1 billion. Boehner, in his original letter to the White House, said the list of 219 proposed rules is “almost a 15 percent increase over last year and appears to contradict public suggestions by the Administration this week that the regulatory burden on American job creators is being scaled back.”

Labor, Enviro Rules in House GOP Bullseye

In a move related to the House Speaker John Boehner (R, OH)-President Obama public tug-of-war over the economic impact of pending Administration rulemakings, House Major Leader Eric Cantor (R, VA) this week announced his party’s intent to nullify several additional labor and environmental rulemakings. Cantor told the Republican Caucus in a memo released on Monday that National Labor Relations Board (NLRB) and EPA rulemakings are targets for aggressive action because they are “costly bureaucratic handcuffs that Washington has imposed upon businesspeople who want to create jobs.” Cutting back on costly regulations is half of the GOP jobs creation plan, paired with reform to the tax code, particularly for small business. Cantor would like to see small businesses able to take a deduction equal to 20 percent of their income. President Obama will unveil his jobs proposal at a speech September 8 before a joint session of Congress. The first labor regulation target is the NLRB’s action to interfere in the placement of production facilities by private companies, a nod to the board’s action to prohibit Boeing Corp. from relocating a production facility from Washington State to South Carolina. Second on Cantor’s list is the NLRB action to make union elections easier. EPA targets includes rules that would regulate emissions from boilers and pending rules seeking to force utilities to regulate how much air pollution crosses state lines. Also on the list of targeted rules are those implementing the health care overhaul bill passed by Congress.